How to Invest Successfully in Short-Term Rentals

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Kevin Schneider: On this episode of the Hidden Money Podcast, we have a returning guest, Shawn Moore. I think he did one of our very first episodes of the Hidden Money Podcast, so I'm not sure if we've grown up in the past two years, but he sure has,

and so, we're just so happy to have him back. Welcome back to the show, Shawn!

Shawn Moore: I am really excited. You guys know, I could talk to you guys for hours and hours. I know you guys are busy, but I always appreciate you having me on and having these conversations.

Kevin Schneider: Yeah, and the last time we chatted, we were in the weeds of the tax. Shawn, in your background, being in the short-term vacation rental market, that market changes yearly, if not quicker. The tax law on the other hand has not changed drastically in your industry. It's relatively the same rule set and we've gone over that.

So, if you want to know more about the short-term rental (STR) loophole and how we harvest losses against income, go check out Episode 2 (Season 1), and we go through that, but today, we really just want to talk with Shawn about getting an update on the short-term rental [00:01:00] market,

and actually, stay tuned.

Shawn Moore: So, the markets today are hard for someone that wants to buy their first short-term rental, speaking from our experience. Interest rates are high,

Mike Pine: so when you underwrite a deal, it's hard to find cashflow positive if you're conservative, and being a CPA, I can't help but being conservative with my own cashflow and finances. But with interest rates and prices- still don't seem to have corrected as much as I would have thought they would, with interest rates being as high as they are-

so prices are hard.

Also Bekka and I have this dream- it's mostly me- I want to recreate the childhood experience I got to enjoy growing up with my father's lake house. I remember when we got that and we spent every weekend up there. And it's just the memories I have of that are amazing, but I'm pretty darn selective in this STR that we want to buy,

and that's reducing the amount of potential properties I can even bid on and look at. So, let me just use me as a case study, Shawn. So, with prices being the way they are, interest rates the way [00:02:00] they are, and us being selective- we want to be within two hours of our home here in the middle of DFW- that makes it really hard because of the real estate market in DFW is tight.

For three years, we've been wanting to do this and we haven't yet doing it, and I don't see it getting any easier to make the choice to pull the trigger. What would you say to me and Bekka?

Shawn Moore: Yeah. One- I would say- doesn't really matter what market environment you're in. When you said, 'Looking back three years ago, I wish we would've pulled the trigger.' --I promise you three years ago, there was an element of hard in the market. Prices.. Inventory was drastically lower than we've ever seen in the past.

It's still super low, but we had really low inventory. There were a lot of buyers in the market- a lot of people competing, paying over asked price. You were having to come up with a lot of extra cash to buy a property, because when you pay over asked price, and over appraisal, you're having to come out of pocket there.

So, that was hard too. I've been investing full time for 24 years- I've never been in a market that feels like, 'Oh, finally, this is the best time to buy.' -- And it never feels like that. Looking back, they all look like [00:03:00] they were good times to buy because we recognize the benefits of buying back in the day, right?

The best time to buy real estate was yesterday.

The next best time is now. The best time to plant a tree was 20 years ago. The next best time is now. It's just that same concept that you have to remember.

These are long term assets, the environment we're in today, specifically in the short-term rental game, it's also an environment where three years ago, we were in this bubble of anybody that had a short form rental looked like a genius because it was like having toilet paper during COVID. Everybody was making money. So, it was really easy to just dive into a game that most people didn't really understand, and that's a dangerous game to play.

It's like, 'Hey, listen, I'm jumping in and I'm making money.' --But when you're investing in anything long term, you really need to understand the entire game because the markets are going to shift and change. They're cyclical.

They change all the time.

Today's environment- we have, still, really low inventory, which is keeping prices relatively the same. There's a lot of markets that are still going up. When you go into some of the lower [00:04:00] priced areas in the Midwest and the Southeast, those markets are still continuing to appreciate in double digit ranges.

Like you're getting 10..11..12% appreciation. Some of the bigger markets that are more established, they're leveling off, but you're still seeing that level off feels like it's retracting because it's retracting from 15..18% appreciation year over year, to 5..6%,

and so, they're still going up in value, which is a little, in your case, you're like, 'This is a little frustrating because my cost of ownership has skyrocketed because interest rates have doubled and tripled.' -- It's like we watched them go from 3% to 6% to 8% or 9% on investment properties.

So, you're saying, 'Okay, my cost of ownership- prices are still high because inventory is so low, interest rates are super high, and so, my revenue range- that gap between what I'm paying to hold this property to what I'm making on it- continues to shrink.' -- And so, the hard part of the market right now.

That's the frustrating part. The flip side of that market is the game we're playing in short-term [00:05:00] rentals is becoming a very mainstream market, a very mainstream asset class at this stage.

You guys work with a lot of investors. You've worked with a lot of investors that buy multifamily deals, lots of different commercial properties.

Up until probably 3 or 4 years ago, there wasn't that many of your investors that had portfolios of short-term rentals. Now you're talking to a lot more people that actually own these and buy these as performing assets, and so, it's recognized now from the investment standpoint as a mainstream asset class, but also from the consumer standpoint, this is a very preferred accommodation.

It's not going to take over hotels. That was never going to be the case when people said, ' The hospitality industry is getting disrupted, and hotels are reeling!' --and everything else. It's a different product. Hotels are not going anywhere and neither are short-term rentals.

They're independent of each other in the hospitality space.

And so, because it's mainstream, because it's more mature, you're starting to see that now we're past that point where everybody with a short-term rental is making money, and we're now to the point where the top 20% of the [00:06:00] owners in the markets make the money.

It's that 80- 20 principle. And so, the key is saying, 'How can I buy in this environment when my cost of ownership is pretty high, but also figure out how I can operate toward the top 20% of the market to make the money?' --because there's a disproportionate amount of money being spent at the top of the market than like the middle and bottom of the market,

and when you look at these markets across the board, and like when you look back, Mike, three years ago, this market.. whatever market we're looking at, that's a couple hours from the DFW- let's say it's up in Broken Bow- we're a few hours away. So, up there, we're looking in that market- the amount of money being spent by the consumer is significantly more than it was during that COVID boom, and that's one thing that a lot of people don't realize. So now, there's also significantly more properties on the market that you're competing against as well. The markets are- the inventory is significantly more so- in the news.

And when we see things on the surface, we're like, 'Man, my [00:07:00] fair share of business has gone down significantly!' --which is true, but your unfair share of business and your upside potential to maximize these assets is better than it's ever been, and that's the exciting part about it.

The other thing that you have to remember is inventory doesn't correct overnight, and real estate is fairly simple economically, when it comes to prices- going up or going down- and so, everybody's like, 'Things are going to burst. The bubble is going to burst. The prices have got to come down. They've got to soften.'

Well, until inventory, until the supply and demand starts to even off- and supply continues to be way lower than demand- those prices aren't coming down, and that supply doesn't catch up overnight. You can watch the new builders out there. Right now, we're in an environment where nobody is selling because unless they have to sell, why would you trade-up a home?

If you can find a property right now, that is break-even, for example, and you're making the payments and you're getting in while you're not competing against a lot of buyers,

while rates are where they're at, [00:08:00] eventually you can refinance, because here's the environment I think we're going to have in three years- eventually we're going to see rates come down,

and we're also going to see a lot of shadow buyers waiting to pounce when rates come down. They're like- 'I'm just waiting till it's a little bit more affordable.' --The problem with that is when that happens,

prices are going to skyrocket again. So, now all of a sudden, you're going to have all that. You're going to be like, 'Man, I'm glad I did that because now I can just refinance while everybody's bidding these properties up.'

--And then in your case, Mike, when you're saying, 'Hey, I'm all in on this.' There's always challenges- there's always going to be.

And like you said, 'I want this one house. I want this perfect scenario.' --If that's the case, we have to be pretty patient because you're not looking at a lot of inventory. You've looked and might see one new property that fits the bill every three or four months, and I can also tell you there's never going to be the perfect market.

There's never going to be the perfect property. We want to check as many boxes off as we can, and we want to have some non-negotiables, but then, we're going to have to make some concessions in other places, especially on that first one or two, because you've got to have it to [00:09:00] where it pays for itself or cash flows.

I was talking on one of my coaching calls yesterday with our group, and they were saying, 'Why would you buy a break-even property right now when you can go get a return? I'm better off putting in a high-yield savings account, getting a 5% or 6% return.'

--I said, 'Well, maybe.. Maybe you are, maybe you aren't.' -- but I know that most of these markets- we buy quality assets in quality markets- quality markets appreciate over time, and they appreciate better than the national average. National average is 5%. Let's say you have a market that's appreciating at 5% and you're breaking even.

I pay $500,000 for that property. I put 20% down- $100,000, and it goes up 5% a year. I'm making 25% return on my investment every single year because the entire property went up by 5%, but I only have $100,000 into it, and somebody else is paying for an asset that's going up.

So, I think that you have to look at it as a holistic picture of saying interest rates affect your cashflow, and they can change and you can refinance, but they're not necessarily affecting the overall investability of the entire over that long time horizon of 3.. 5.. 10 [00:10:00] years of owning these assets.

Mike Pine: If I wanted to make a pro and con list, let me start with this. So, the point is we get to use the power of leverage. If we're doing 20% down, we get a 5x multiple on any appreciation we get. That's a big one. The other one- property over time- always goes up over time, if it's quality and in a good place. Always. That's almost as guaranteed as guarantees get in the finance world. Never a perfect time to buy, but you go back and look, like you said- every time I talked myself out of buying something, or didn't pull the trigger when it comes to real estate, looking back, I regret that. Those are two big pros if we can get it to pay for itself.

Shawn Moore: And those pros have to do with the time horizon you're looking at something in. In our game, you have to look at it at a longer time horizon, and say, 'Okay, am I in this for 3.. 5.. 10 years. What is the time horizon that I'm really analyzing and looking at? Or am I looking at a 6 month or a 1 year?

Those are different decisions you're going to make because the [00:11:00] environment is choppier when you're looking at it in a shorter timeframe. Now, I don't like buying negative cashflow properties by any stretch, and there are plenty of properties, right now, that you will analyze are negative cashflow.

That's going to be the environment though, going forward. Any mature asset- that's the case. There are people who actually lost money on their properties when it was in the boom period, but they were fewer and farther between than they are now. Now, you're going to have the majority of people are going to struggle and bounce around the middle of that market,

and the top 20% are the ones that are going to see the success. So, that is a con, right? You have to dial in and really make sure you're buying the right properties in the right areas. You're setting them up to create those unique experiences, and you understand marketing on how to articulate what you have in really, really crowded markets.

So, that would be on the con list, saying- I can't just buy this property, throw it on Airbnb and expect to make money. Now I've got to say- Okay, am I committed to really learning and playing the game at a high level?

Mike Pine: Good point.

Kevin Schneider: And are you finding that people are having to put more [00:12:00] money down? Like you're mentioning this increased interest rate, increased inflated fair value, and for people to cashflow on a monthly basis, we could get away with maybe 10% to 20% down or 25%, are you seeing people trending to put 50% down in short-term real estate in this period, and what do you typically advise?

Shawn Moore:

That's a really good question, because you're right, we used to be able to cashflow with the 10% down products. Now, 10% down is great because I put less down, but most 10% down products, you're going to be lucky to break even with them.

And so 20%.. 25% down- you're still finding, and we're still seeing assets, the cashflow when you're putting 20%.. 25% down. There are times where you put more than that down.

The way that I've looked at it, and this is not scientific at all, is because people say, 'Why don't you just pay cash right now?'

-- and right now, we've got across the board in the US, 25% of the buyers are cash buyers, and that's as high a percentage as we've ever had, which means there's a lot of investors coming in and buying up assets right now. They want to park their [00:13:00] money in quality assets because it's a great hedge against inflation,

Shawn Moore: so why would we pay cash, or put way more down than leverage? The leverage is great, but you don't want to leverage so much that you're negative cashflow, and there's going to be a tipping point for every property. One of my mentors a long time ago, and he makes a lot more money than I've ever made-

one time I asked him, 'Why aren't you just paying cash for all these properties? Why are you getting loans on all these properties?' --He said, 'If I can get a yield spread on somebody else's money, I'm going to do it.'

His rule was- if I get 2 points above what I'm paying or more, I'm going to borrow on that money. So, for example, if I'm borrowing at 9%, that means my asset has to be producing at 11% or above on a return, so, that's what we look at.

That's what we try to do as well. In this environment, when you start to stack up all the different costs and everything else, and then the revenue, it's all the ratio between what your costs are and the revenue that you're generating. Depending on what that revenue looks like will dictate how much you should be borrowing or how much you're going to have to put down to get that same yield spread or above.

But [00:14:00] to that point, Kevin, it is harder to cashflow. I tell people that we mentor all the time- the 10% now product is a great product- you put less down, but be happy at break-even right now, because you're leveraging a lot more. You're leveraging 90% of that property and a lot higher interest rate than we did three years ago.

So, if you want to trim that debt service down annually, the only way to do that is put more money down so you have less debt that you're servicing.

Mike Pine: Yeah. We ended up getting a long term rental last year and I had to put 40% down just to break even!

Shawn Moore: And we're seeing that really common on long term rentals, some commercial space now, multifamily. The nice thing about short-term rentals- done correctly, they have higher earning potential, typically, than some of those other properties.

So, you don't have to quite hit that, but some markets you do. Some markets we're seeing- if you're wanting to break even, you're putting 30%.. 40% down to break even on them. Most of the time we're still in that 20%.. 25% though.

Mike Pine: What about where to go? You mentioned Broken Bow.. but again, I'm in the middle of DFW- Broken Bow's, about three hours away. I love it. We used to go up there a lot and went up there for my [00:15:00] original mini-moon, right after we got married, you could get nice cabins for just barely over $100 a night.

That's no longer the case. But in the last 5..6 years, we've seen values of properties go up more than 300%. So, it seems like we're out of price.. out of market because of the prices are so high. I'm working with a realtor that we were referred to by Vodyssey and we've asked her, 'Hey, look, I don't want to buy in Broken Bow, but I want the next Broken Bow.'

--The realtors have no idea why or where that is, and they just tell me, 'Look, go to the proven place. We know where this is. You'll still make it.' -- Show me some good forecast that it looks like it's still a good buy or if you can get the right property, but I want a property that's not in a developed STR market, in a perfect world.

I want, maybe, to create my own new market. Is that a dumb idea?

Shawn Moore: It's really hard. I always tell people it's a lot easier to go to an established market that is crowded and stand out in the crowd, than [00:16:00] go to an emerging market that doesn't have that demand yet, and be the best game in town, but you don't have the demand. It's a lot harder to create demand than stand out in a crowd.

Does that make sense? It's not that it can't be done, and it's not the people don't do it, but it's a little bit more of a longer time horizon because your one little property is not going to affect people coming to that market. So, you're really waiting for the wave to get there.

And so, and really until you, until that wave comes and there's a sufficient amount of demand, which is people coming in and spending money there, it's hard to make any money in those markets. Acquisition costs are less, your holding costs are less, and they have that upside potential, but most established markets that are very saturated and crowded-

I've always had more success standing out in those markets because the demand is already there. There's already people coming. The other thing is there's not a lot of secret areas anymore with the boom of short-term rentals the last three or four years.

The way that it's become very mainstream, and where you can put [00:17:00] up a property on Airbnb from anywhere, accessibility to a lot of the outskirt areas has been really good for the last three or four years now, and the consumer knows that. So, if there's areas that don't show a lot of demand, there's a reason people aren't wanting to go there a lot of times,

and that's really hard to change. It's almost like you think about some of those businesses or restaurants in our hometowns, and you're like, 'Man, every month, I feel like it's a new business or a new restaurant- like, nothing ever establishes in that building or that street.' -- and it's weird because right across the street is where everybody goes, so why can't something be over here? We find that a lot in some outskirt markets where it feels like that. I think it's market behavior. I think the market's just like- if I'm going to spend the weekend, I'm going to go where I know there's good restaurants and there's things going on. I think that that's what you get in the more established markets.

And so, yeah,

I think, Mike, that's a difficult thing to do, and I usually try to dissuade people from that strategy because it's really, really hard to go to those small markets and create demand.

Kevin Schneider: Then that's really good [00:18:00] advice because you're getting into something that's already a little bit more steady, but how do you stand out? So, let's say, hypothetically- Broken Bow is very saturated.

It's very popular with the short-term rental market- the cabin look with very nice finish out hot tubs.

It's we can't really tell a difference between one property or another. How do you even start to stand out if you wanted to get into that market?

Shawn Moore: Yeah. It's a great question because you're right- almost all of these established markets, there's really good properties. They look like model homes. They're well appointed. They all kind of blend in together, and they're all nice. It's not like they're crappy.

Let's forget about the really bad ones, because those ones, it's obvious, but the majority of the market are typically really nice cabins that are well appointed in these types of markets. The proximity is very similar, so the thing that we've been able to do, and figure out, and be able to articulate is- one, most people are selling the wrong thing.

[00:19:00] Almost every Airbnb listing you look at, you could take that exact listing and you could put it on Zillow and sell the home because they hire professional real estate photographers, and they go in there and they're showing off this beautiful cabin in the woods, or wherever it's at, and that's what they're selling you.

So, what we do is we spend a lot of time, and what we really, really focus on is after we have this really great cabin and the great area proximity-wise- we're not selling real estate, we're selling experiences.

And so, one- I've got to curate a great experience- I've got to identify who my target audience is, and I've got to curate this amazing experience, and we bring it to life with all this custom artwork and these crazy things that we do in the properties. And you guys know Mike Whitfield from WYN Development- you talk to him and he's going 90 miles an hour for four hours because he's so creative!

So, he's one of our expert advisors, like you guys are inside of our Vodyssey network, and we bring him in to create this great experience, which is different than setting up a model home. It's a small difference, but it makes a huge [00:20:00] difference on the backend.

So once we curate this great experience, then what we do is we hire lifestyle photographers. We do not hire real estate photographers. We bring in lifestyle photographers, and if you think about a lifestyle photographer on the commercial side, like if somebody was selling an RV or a boat, they don't just take pictures of the boat or the RV. They've got people using it out on the lake.

They're sitting by the campfire with the RV in the background, right? And they're not necessarily selling that particular boat or RV. They're selling the experience you would have when you're using that stuff. So, we do the same thing when we try to articulate what we have to offer.

We're selling the experience. The house is part of the experience, but it's not the focal point. We're setting all these different things up- we're bringing the outside area in, we're bringing the lakes in, we're bringing the national parks in. We're showing that in our listing when somebody sees our cabin, they're like, 'Man, that's just a little different.

That's a nice cabin, but I can totally see myself having a lot of fun here for the weekend. The other one, I have to imagine everything I'm going to be doing based [00:21:00] on knowing the area.' -- we don't leave anything to chance when we're trying to articulate that. So, those are the two biggest things, Kevin, is we have to really identify a target audience and set up an amazing experience for them.

And sometimes it's very like over the top in your face. I've had one that was specifically set up for fly fishermen. Everything we did was to make that fly fishing experience great, and it was customized to that. Other ones are for adventure seekers. Other ones are for families coming in- whatever they're doing, we're going to set it up.

We're going to bring the outside into the elements to the property, with all the custom artwork and custom setups that we do, and then, we bring in these amazing lifestyle photographers and their three day photo shoots. Well, I'll talk to somebody, 'Man, that photo shoot just cost me $8,000.'

--and they're like, 'You're an idiot. I paid $300 last week for a real estate photographer to come in, and they were here for two hours.' --and I said, 'Yeah, well, we'll see who's the idiot at the end of the day, because I'm going to run with these. These are my marketing assets. That's my main 24x7 sales rep for the next three to five years.'

--So, I can now scroll through in these markets and it stands out on the [00:22:00] top side, on the better side, when somebody takes the time to go through that process, and it doesn't just blend into the crowd of this beautiful cabin in this nice area that looks like everybody else's. It seems really easy to talk about- to create this experience, understand that we're not selling real estate, we're selling the experience- it's really, really difficult to execute because you don't really understand the little, small details that go into that

when somebody is subconsciously looking at those properties, saying, 'I could see myself here. This one! I just have to- it's a great cabin!'

Kevin Schneider: Good. Yeah.

But guess what? So is a thousand other people in that market- they're hiring the same real estate photographers and they're doing this.

I have a buddy who bought in Broken Bow. He bought maybe three or four years ago and he marketed it really well. He's been doing really well, but now he's- 'Hey, it's super saturated here!' --and I think he's running into the issues that you hit on.

He's not standing out, so his vacancy has gone up, and now he's like, 'Okay, I think I'm going to sell it.' --and so now he's looking at selling it. He's getting the [00:23:00] sales price when he bought it two years ago because of the oversaturated.. there's so many people selling real estate in Broken Bow.

It's just such a weird market, and I was like, 'Man, because real estate always appreciates- that's what I'm always taught- it always appreciates, always goes up, but he's like, 'Man, I'm struggling to just get what I got out of it when I bought this two years ago because everyone's coming here.'

Shawn Moore: --It's really interesting and we're seeing it. I don't like to see people struggle. I want them to be successful with their properties, but there are a lot of distressed sellers in the short-term rental game right now, and there are a lot of really good properties in really good markets that are set up really nicely, that need just a facelift.. they just need some life breathed into it.

We need to tell a story with that experience, but we can do that with custom artwork for $5,000 on a really nice property. So, we're really, on the investment side, getting pretty excited right now about a lot of these really great assets, because there's a lot of people that rode that wave, and they don't know how to get out of that middle of the market.

They don't know how to stand out. It's what keeps us in business. That's what we [00:24:00] do in our world, is to help people do that. I just did a workshop, but literally last night, and it was a three hour workshop on how to revitalize a struggling property.

I always do these live workshops and people submit their properties. Out there, a lot of people say the biggest mistake is you buy the wrong property in the wrong area. While that is important, most people's intuition takes them and leads them to pretty nice properties in pretty good areas with demand.

The biggest problem is what we just talked about is nobody knows how to stand out. Nobody knows how to differentiate themselves, and until people start to realize that, and it feels like I can talk in spring from rooftops about this stuff, and fewer and fewer people are even doing it because it's harder to execute. But to your point, Kevin, your friend- we're finding some of these properties, and we're like, 'Man, this is a bargain for us right now.' --because you're right,

they're selling it for what they bought it for. They just want to get out of it because they bought it as an investment. It's not doing what they hoped it would do, and it's not their primary home, so they're like, 'I'm just dumping it now.' -- And so, I feel like right now is a really good time to be looking in some of these major markets because you're [00:25:00] finding some really good assets that they're selling for pretty much what they're into it,

and they've got two year old furniture that looks like a model home, and we can work with all that. It's a great foundation to start with. It's unfortunate, because unless they make those changes, that market environment that they bought in is not coming back. That market has shifted.

That was a blip in the market where everybody was making money, because inventory was, supply was way less than demand, at that point. And so, now there's a lot more supply, it's a lot easier to grab a property. It's a lot more accessible to put it on Airbnb, Vrbo- those different platforms.. management companies are out there..

And so, you have all these people competing in the middle of the market, and it's a really hard place to compete.

Kevin Schneider: Yeah. I think that is the piece he's missing, and that's who came to my mind when you were talking about that. He's in a great market, has a great property, but he's stuck. He needs y'all. There's so many people out there that need this kind of level to step up their game a little bit, and I know you've changed in the past years of how you've taken your [00:26:00] company Vodyssey, and you're shifting of how you interact with people.

Can you tell us a little bit about that, and how you're serving people more on the front end? --which is terrific. There's so much education you give out there. This stuff that you're even giving here for free, is just a gold mine, and you're doing that across the board, across your company.

Can you tell us a little bit about that?

Shawn Moore: Yeah, Absolutely, and that's our goal right now.

There's a guy that I follow and watch on the business side of life. His name's Alex Hormozi. He's a young guy. He's one of the smartest guys out there, and his philosophy is, 'I'm just going through. My goal is to help as many people as I can, and not hold anything back.'

-- and it kind of opened my eyes up to this concept. I was like, 'Okay, this is a pretty good idea. I can see what he's doing and.. super valuable.' --and our goal, I've always said, is to help people walk into the short-term rental game with their eyes wide open.

Shawn Moore: There's a lot of people who are just riding a wave.

We're in a very infant stages of a brand new asset class. There's not a lot of people with a lot of experience. We've been fortunate to have been investing in short-term rental [00:27:00] since 2006. We've been doing it longer than anybody that I know of out there, that actually coaches this stuff, by a long shot.

We've got a lot of collective experience. We've seen a lot of market ups and downs. We've been fortunate to have built the company to where we have now, and we're in a position to go and just give anything and everything we can to help people recover. We buy properties right now.

What I do before I buy a property, I tell people what I'm going to do with their property. Like your friend, if I was looking at his property, I would talk to him and say, 'Hey, listen, here's what I would do. Here's what I'm going to do with it.

You ought to really think about that because you've got a lot invested in this. For an extra $5,000 investment, I think you can pull it out.' --and I'm not even talking about having them in our coaching program. We want to lead with a lot of content because, ultimately, we do believe executing is harder.

They're going to have sticking points along the way, and we have so much information. We have so many reports, and I've been doing it for so long, and I just love talking to people,

and the light bulb sometimes goes off, sometimes it doesn't. But our view of this world- I don't teach anything out of theory, I only will teach [00:28:00] the stuff that we do. I don't manage my own property, so I don't teach people how to manage properties. Even though I know how to do it, I wouldn't teach it because I don't do it.

My goal right now with Vodyssey is to put out as much front end information as we can, so that we continue to raise the bar, because the struggle is real in the middle of the market, and everybody's still looking back at that COVID boom that we had saying, 'I think that might be coming back.'

--and I want them to realize it's not coming back. So, let's do the things that we need to do. Our mantra here is- Nobody's coming to save us. --in Vodyssey. We have to have that attitude of self reliance, personal responsibility, to build those lives that we don't want to take a vacation from.

Sometimes that requires rolling up our sleeves, and so, we want to help people do whatever we can to roll up their sleeves and move forward in this game. Sometimes, ultimately, they'll hire us, but I always tell people we'll give them everything for free now because it helps everybody in the industry.

It helps raise the bar completely across the board, and that's what our goal is right now.

Shawn Moore:

We can point them to www.vodyssey.com if they want some more, because that's where we have all of our free reports, and they can go check out the podcast, listen to some of that stuff. They can get my book. And so, they [00:29:00] can get some more information if they're interested.

Kevin Schneider: So, what's your gut feel on the right markets to buy in today? Give me your top 10 for the nation right now. Where would you go if I came to you and said, 'Hey, Shawn, we want to buy and maybe we don't need to buy locally.'

Mike Pine: Where are the top 10 places we should look here?

Shawn Moore:

I'll give you some specific markets that we're looking at right now, but a general type of market that we really like, right now. We like college towns. We think that some of the college towns have significant profit drivers.

A lot of these, like even in the major conferences, your big 12, your big 10, the SEC conferences, ACC- a lot of those are in smaller towns that don't have a lot of really good hotel rooms, and everything else. You can go buy fairly affordable, still, in a lot of these towns as well.

So, your acquisition costs and the ratio between acquisition cost and revenue is very favorable, right now, in a lot of those towns.I like the Southeast, and then the middle of the country in the US. I really liked the Bourbon Trail.

Those are some markets that we're looking at.

I'm looking [00:30:00] up in the Wisconsin Dells area, right now, as a market that we feel has a lot of potential. Ohio, outside of, in Hocking Hills area in Ohio, which are sometimes a surprise to some people that those are the markets that

we're making offers in, right now. So, that's where we're at. I've always liked the state parks, the national parks, which is where you come into the Wisconsin Dells and the Hocking Hills. We're looking in South Bend, and then we're looking down in outside of Louisville on the Bourbon Trail.

Those are some of our top markets, right now, that we're interested in, and we're looking at.

I always am very concerned about investing and buying, for the long term, in areas that they've got to be pro-property ownership rights and pro- STR regulations. Those are definite things that we have to look at, right now, and they typically go hand in hand. There's certain areas that I love to visit that I would never buy, just because of the rules and regulations, and the property ownership rights that are not necessarily in the favor of the actual property owner.

They're typically landlord-tenant laws, but that filters down to us in the short-term [00:31:00] rental game as well.

Mike Pine: Sounds great.

Shawn Moore: I like the bigger markets, the beach markets, the mountain markets, your Class A resort towns- they're still really good, and there's really good opportunities there, but I feel like that the ratio for cashflow in those markets I just mentioned is better, because in most of those markets we're looking at acquisition prices in the $300,000 range, where you're not looking at that in some of your major markets.

You can buy a $300,000 property, and you've got the revenue potential of $90,000 to $100,000 in gross revenue- that's not net- but in gross revenue, that's a pretty good revenue range, where you go into Destin and you're going to spend a million dollars to get that same $100,000 in gross revenue, which is going to barely break even.

Mike Pine: Right. So, for Bekka and I, you think maybe if we want a lake house with some property, but we want it to cashflow at least neutral, you think we ought to reconsider Broken Bow?

Shawn Moore: Yeah, I think you will find people like Kevin's buddy that have good properties, that are frustrated with them. You can get into them and you don't have to do a lot outside [00:32:00] of breathing a little bit of life and creating that experience and then articulating a little bit better.

Broken Bow's one of those markets, like you said, it tripled in price over the last few years. The acquisition price is still a real factor, that you have to say, 'Is that the market I want?'

But I do think, Mike, that you look at more established markets. I think it is smarter to run down that road than try to find the next emerging market. That's a really speculative game and it's a tough game to play.

Mike Pine: All right. Lesson learned from the one and only Shawn Moore from Vodyssey and the Vacation Revolution Podcast. Man, it's so nice talking to you as always, and we greatly appreciate you coming on here, and I thank you for your advice, as always.

Shawn Moore: Absolutely. Always excited to talk to you

Kevin Schneider: Yeah. And if you want to get some of that great information that Shawn has been referencing, go to www.vodyssey.com. You can actually go there, you can get all the podcasts, you can get education, get his book. The education's there, and then, when you need that next step, you're going to need some professionals in your corner.

You're going to need coaches. You're going to need designers. You're going to [00:33:00] need a realtor. You're going to need people on the finance side, accountants.

Shawn Moore: We're going to need tax advisors, right?

Kevin Schneider: And Vodyssey, is one stop shop.I'm telling you, it's 100% your one stop shop. You've got a built in team ready to roll, if this is a market you want to go to.

So, please go to www.vodyssey.com. Check them out. Get that information. Schedule a coaching call with Shawn M. He's got a great team as well. So, yeah, the ball is in your court.

Shawn Moore: I sure appreciate it. You guys are awesome.

Kevin Schneider: Thank you, Shawn.

Mike Pine: Thank you, brother.

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